That was a no-show. It was a single-legger. They were just shopping me. The grandmother was the only one there. The dog didn’t like me. They didn’t have any money. There were two other contractors there with me. They said they only had 20 minutes.
These are a few of the reasons I hear from sales people who say a certain lead shouldn’t count toward their close rate.Should they count? Why is close rate important to measure anyway?
Close rate is a very useful measurement and should be carefully tracked, published and used as a management tool. Here are some guidelines.
- All leads count. Sure a small percentage will be no shows for various reasons. A high no-show count can be an indicator of lead quality or a poor lead-setting process. This is important to know. Same thinking applies to all of the rest of the “reasons”. Count ‘em all.
- Measure First Call Closes and Follow Up Closes. This tells you a lot about the sales person’s sales process including whether he asks for the sale (some don’t) and if he follow’s up (most don’t). It’s possible that the Follow Up Close Rate will be higher than the First Call Close Rate, reinforcing to the sales person how valuable follow up is, and telling managers how important that is to the company.
- Measure Close Rate by Lead Source. This very important tracking provides the best feedback on your marketing efforts and over time will save a lot of time and money. I’ve had clients who are diligent about tracking this and those who do track it tend to spend a lot on advertising and marketing. Want to guess on the best lead sources? Repeat customer. Referral. Technician. In that order. Why invest money in anything else until you have mastered getting leads from those sources.
- Measure Average Sale by Lead. This one will surprise you. Highest: Repeat and Referral. Lowest: Internet, Home Depot.
Close Rate KPI’s
- Total Close Rate 40-60% depends on lead source and sales skills. 40% at full margin can be just fine.
- First Call Close Rate 15-20%. Follow Up Close Rate the same or more.
- Close Rate by Lead Source 5% – 90%. Love the Repeat and Referral…and often the Technician Turnover.
- Average Sale by Lead depends on your market. $8-10,000 for a high and $4-5,000 on the low end.
Consider tracking all of these and review them weekly. Use the information to guide you toward focusing your efforts on creating better leads and being better at following up until they “buy or die”.